JURIST - Paper Chase: Federal judge approves settlement with 9/11 cleanup workers

[JURIST] A judge in the US District Court for the Southern District of New York [official website] on Wednesday approved a settlement agreement [overview, PDF; materials] between New York City and 10,000 rescue and cleanup workers who became sick or injured from responding to the 9/11 attacks [JURIST news archive]. Judge Alvin Hellerstein approved the deal [CNN report] after a hearing to determine its acceptability and urged the plaintiffs to agree to it as well. The deal would distribute between USD $625 million and $712.5 million, depending on how many plaintiffs agree to the deal. The city's insurer, WTC Captive Insurance Company [official website], offered the deal after its previous offers of $575 million and $657.5 million were rejected. The plaintiffs' lawyers will also reduce their legal fees from 33.33 percent to a maximum of 25 percent, giving their clients an extra $50 million. The funds will be distributed [NYT report] between the plaintiffs by a claims administrator who will determine the amount received by each based on the severity of the illness and how strongly the health condition can be linked to the cleanup. The agreement must be accepted by 95 percent of the 10,000 workers before September 30 in order to become effective.

The agreement was first proposed [JURIST report] earlier this month, following two failed settlement attempts between the parties. Hellerstein rejected a proposed settlement [JURIST report] in March, citing an unfairness of claim amounts and the over-complicated process to determine compensation. Hellerstein also said that attorney's fees should be limited and paid by the WTC Captive Insurance Company, rather than by the claimants. WTC Captive is a nonprofit company created by Public Law 108-7 [text, PDF] with $1 billion in FEMA [official website] funding to compensate injured workers involved in the Ground Zero rescue and cleanup efforts. In 2007, the city agreed to enter into settlement negotiations over a federal class action lawsuit filed on behalf of more than 9,000 emergency and cleanup workers who may have inhaled toxic dust at World Trade Center site, which Hellerstein allowed to proceed [JURIST reports]. The plaintiffs claim that they were not properly equipped or trained to perform their tasks.